Distribution Number 6. Legal & General Multi Manager Growth Trust

Transcription

1 Distribution Number 6 Legal & General Multi Manager Growth Trust Annual Manager s Report for the year ended 15 January 2011

2 Contents Page Number Manager s Investment Report* 2 Authorised Status* 4 Directors Statement 4 Statement of the Manager s Responsibilities 5 Statement of the Trustee s Responsibilities 5 Report of the Trustee 6 Portfolio Statement* 7 Independent Auditors Report 8 Statement of Total Return 10 Statement of Change in Net Assets attributable to Unitholders 10 Balance Sheet 11 Notes to the Financial Statements 12 Distribution Tables 20 Trust Facts 21 Performance Record 22 General Information* 23 *These collectively comprise the Manager s Report. 1

3 Manager s Investment Report Investment Objective and Policy The investment objective is to provide long-term capital growth. The Trust aims to invest in a wide range of Collective Investment Schemes including unregulated Collective Investment Schemes and will pursue an active asset allocation policy across all countries, currencies and sector representations. The Trust may also invest directly in transferable securities, money market instruments, near cash, cash and deposits. Manager s Investment Report During the year under review, the bid price of the Trust s accumulation units increased by 14.3%, compared to the IMA Active Managed sector median return, on a Total Return basis, of 12.9%. This placed the Trust in the second quartile (36th percentile) of the sector rankings. (Source: Lipper, bid to bid, net income reinvested, in sterling terms, no initial charge). Over the period since launch (25 April 2008) to 15 January 2011 the bid price of the Trust s accumulation units increased by 21.1% compared to the IMA Active Managed sector median return, on a Total Return basis, of 11.5%. This placed the Trust in the first quartile (12th percentile) of the sector rankings. (Source: Lipper, bid to bid, net income reinvested, in sterling terms, no initial charge). Past performance is not a guide to future performance. The value of investments and income from them may go down as well as up. Exchange rate changes may cause the value of any overseas investments to rise or fall. Market/Economic Review The year was a volatile one for financial markets, with investors continuing to be concerned about the contagion effects of the escalating European sovereign (government) debt crisis and the potential for a double dip back into recession. All in all, however, the aggressive fiscal and monetary policy easing enacted in the world s major economies (including the delivery of the second round of Quantitative Easing by the US Federal Reserve in November 2010) instigated the process of a global recovery, and equity markets rallied hard to finish the year in distinctly positive form. The environment eventually served to benefit risk assets, while a meltdown in Developed Market government bond yields during the year did eventually reverse itself towards the end of December Commodities put in a strong performance for the year, with Gold in particular benefiting from the environment and rising more than 20% over the period, and Oil ending the year almost 10% ahead at more than $90 a barrel. Elsewhere, the MSCI AC World Index rose just over 15% in sterling terms over the period and the FTSE All Share Index by a similar amount. 2

4 Manager s Investment Report continued Trust Review Both fund selection and asset allocation contributed positively to the Trust s outperformance over the period under review. Beginning with the former, key outperformers included Schroder UK Alpha, Henderson European Growth, First State Asia Pacific Leaders, Investec Global Gold, First State Latin America, Neptune Russia and Greater Russia, Lazard Emerging Markets, GLG Alpha Select and CF Neptune China. Invesco Perpetual Income, Investec American and Jupiter International Financials lagged. Turning to asset allocation, the overall bias to equities added value, most notably our overweight positions in Asia Pacific (ex Japan) and Emerging Markets. The Trust also gained from the above-average exposure to the Energy sector, but the positions in Financials proved detrimental. Activity over the period included the introduction of new holdings in GLG Alpha Select, Veritas Global Equity Income and Investec Global Gold, together with the disposal of our small holdings in River & Mercantile UK Equity Unconstrained and M&G Optimal Income. We also switched our holdings in Jupiter Financial Opportunities into Jupiter International Financials and sold our holding in Lazard Emerging Markets, due to it closing to all new monies for capacity reasons, and reinvested the proceeds into the Ignis Hexam Global Emerging Markets Fund. Outlook Looking forward, we remain cautiously optimistic in our investment strategy and hence biased to risk assets, based on a view that economic and financial trends will continue to show overall signs of improvement over the next 12 months certainly recent, more upbeat, economic data and the extra US fiscal stimulus supports such a view. The key fundamentals for equities valuation, earnings outlook and liquidity still look favourable to reasonable. That said, we expect problems to surface throughout the year given the still fragile backdrop and thus currently see volatility remaining high, with the market likely to continue oscillating between risk-on rally periods and risk-off retrenchment ones. When one stops to consider the pain inflicted by the financial crisis that began in late 2007, then it should come as no surprise that the healing process will take place over a number of years, rather than months, and there is still much work to be done. Part of the life-support surgery to date has involved massive government and central bank interventions, at times unprecedented and unorthodox, which have introduced major dislocations and distortions into the economic and financial landscape. This has taken us into uncharted territory and is causing much uncertainty and anxiety over what will come to pass when such stimulus is ultimately removed and normality is restored. Legal & General (Unit Trust Managers) Limited (Investment Adviser) 11 February

5 Authorised Status Authorised Status This Trust is an Authorised Unit Trust Scheme as defined in section 243 of the Financial Services and Markets Act 2000 and is a non-ucits Retail Scheme within the meaning of the FSA Collective Investment Schemes sourcebook. Directors Statement We hereby certify that this Manager s Report has been prepared in accordance with the requirements of the FSA Collective Investment Schemes sourcebook. M. B. Boardman S. D. Thomas (Director) (Director) Legal & General (Unit Trust Managers) Limited 3 March

6 Statement of Responsibilities Statement of the Manager s Responsibilities The Manager of the Trust is required by the FSA Collective Investment Schemes sourcebook (COLL) to prepare financial statements for each accounting year which give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the net revenue and the net gains or losses on the scheme property for the accounting year, and the financial position of the Trust at the end of that year. In preparing these financial statements, the Manager is required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are prudent and reasonable; state whether applicable Accounting Standards have been followed, subject to any material departure disclosed and explained in the financial statements; and prepare the financial statements on the basis that the Trust will continue in operation unless it is inappropriate to presume this. The Manager is also required to manage the Trust in accordance with the Trust Deed, the Prospectus and the COLL, maintain proper accounting records to enable them to ensure that the financial statements comply with the Statement of Recommended Practice for Authorised Funds issued by the IMA in October 2010 and the COLL and take in these respects reasonable steps for the prevention and detection of fraud and other irregularities. Statement of the Trustee s Responsibilities The Trustee is responsible for the safekeeping of all the property of the Scheme (other than tangible moveable property) which is entrusted to it and for the collection of revenue that arises from that property. It is the duty of the Trustee to take reasonable care to ensure that the Scheme is managed in accordance with the Financial Service Authority s Collective Investment Schemes sourcebook (COLL), the Scheme s Trust Deed and Prospectus, in relation to the pricing of, and dealings in, units in the Scheme; the application of the revenue of the Scheme; and the investment and borrowing of the Scheme. 5

7 Report of the Trustee Report of the Trustee to the Unitholders of Legal & General Multi Manager Growth Trust ( the Trust ) Having carried out such procedures as we considered necessary to discharge our responsibilities as Trustee of the Scheme, it is our opinion that, based on the information available to us and the explanations provided, that, in all material respects, the Manager: has carried out the issue, sale, redemption and cancellation, and calculation of the price of the Scheme s units and the application of the Scheme s revenue in accordance with the COLL, the Trust Deed and Prospectus, and has observed the investment and borrowing powers and restrictions applicable to the Scheme. London The Royal Bank of Scotland Plc 3 March 2011 Trustee & Depositary Services 6

8 Portfolio Statement Portfolio Statement as at 15 January 2011 All investments are in distribution units or ordinary shares unless otherwise stated. The percentages in brackets show the equivalent sector holdings as at 15 January Holding/ Market % of Nominal Value Net Value Investment Assets Funds investing in Overseas shares % (66.92%) 1,933,385 CF Morant Wright Japan B Acc 4,125, ,383,421 CF Neptune China B Acc 18,131, ,367,985 First State Asia Pacific Leaders B Acc 50,372, ,350,885 First State Latin America B Acc 13,166, ,037,324 Guinness Global Energy A Inc 19,895, ,360,729 Henderson European Growth I Acc 13,160, ,912,505 Ignis Hexam Global Emerging Markets I Acc 24,049, ,231,572 Investec American Fund A Acc 14,820, ,249,652 Investec Global Gold A Acc 18,880, ,988,840 Jupiter International Financials Acc 11,642, ,833,394 Neptune Russia & Greater Russia Fund B Acc 16,246, ,800 Veritas Global Equity Income Fund A Inc 11,726, ,217, Funds investing in UK Shares % (29.28%) 151,594 GLG Alpha Select UCITS III E Inc 16,226, ,467,185 Invesco Perpetual Income Fund Acc 26,826, ,599,343 M&G Recovery Fund A Acc 25,341, ,816,875 Schroder UK Alpha A Acc 10,099, ,493, Funds investing in UK fixed interest securities % (3.44%) Portfolio of investments 294,711, Net other assets 853, Total net assets 295,565, Where any of the above securities are unlisted, they are valued at the Manager s best assessment of their fair value. The total value of Purchases during the financial year was 134,873,236 The total value of Sales during the financial year was 138,661,753 7

9 Independent Auditors Report Independent Auditors Report to the Unitholders of Legal & General Multi Manager Growth Trust ( the Trust ) We have audited the financial statements of Legal & General Multi Manager Growth Trust (the Trust ) for the year ended 15 January 2011 which comprise the statement of total return, the statement of change in net assets attributable to unitholders, the balance sheet, the related notes and the distribution tables. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and the Statement of Recommended Practice Financial Statements of Authorised Funds issued by the Investment Management Association (the Statement of Recommended Practice for Authorised Funds ). Respective responsibilities of Authorised Fund Manager and auditors As explained more fully in the Statement of Manager s Responsibilities, the Authorised Fund Manager is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board s Ethical Standards for Auditors. This report, including the opinions, has been prepared for and only for the Trust s unitholders as a body in accordance with paragraph of the Collective Investment Schemes sourcebook and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Trust s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Authorised Fund Manager; and the overall presentation of the financial statements. 8

10 Independent Auditors Report continued Opinion on financial statements In our opinion the financial statements: give a true and fair view of the financial position of the Trust at 15 January 2011 and of the net revenue and the net gains of the scheme property of the Trust for the year then ended; and have been properly prepared in accordance with the Statement of Recommended Practice for Authorised Funds, the Collective Investment Schemes sourcebook and the Trust Deed. Opinion on other matters prescribed by the Collective Investment Schemes sourcebook In our opinion: we have obtained all the information and explanations we consider necessary for the purposes of the audit; and the information given in the Authorised Fund Manager s Report for the financial year for which the financial statements are prepared is consistent with the financial statements Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Collective Investment Schemes sourcebook requires us to report to you if, in our opinion: proper accounting records for the Trust have not been kept; or the financial statements are not in agreement with the accounting records and returns. PricewaterhouseCoopers LLP London Chartered Accountants 3 March 2011 & Statutory Auditors The accounts are published at: managers-reports which is a website maintained by the Manager. The maintenance and integrity of the Legal & General website is the responsibility of the Manager; the work carried out by the auditors does not involve consideration of these matters, and accordingly, the auditors accept no responsibility for any changes that may have occurred to the accounts since they were initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions. 9

11 Financial Statements Statement of Total Return for the year ended 15 January 2011 Notes 15/01/11 15/01/10 Income Net capital gains 2 36,841,720 66,825,945 Revenue 3 4,477,632 4,722,077 Expenses 4 (3,924,636) (3,483,310) Finance costs: Interest 6 (2,795) (922) Net revenue before taxation 550,201 1,237,845 Taxation 5 (17,977) (197,000) Net revenue after taxation for the year 532,224 1,040,845 Total returns before distributions 37,373,944 67,866,790 Finance costs: Distributions 6 (532,226) (1,041,061) Change in net assets attributable to Unitholders from investment activities 36,841,718 66,825,729 Statement of Change in Net Assets attributable to Unitholders for the year ended 15 January /01/11 15/01/10 Opening net assets attributable to Unitholders 263,159, ,030,277 Amounts received on creation of units 13,853,553 19,206,641 Amounts paid on cancellation of units (18,266,028) (13,874,364) (4,412,475) 5,332,277 Stamp Duty Reserve Tax (83,683) (69,162) Change in net assets attributable to Unitholders from investment activities 36,841,718 66,825,729 Retained distribution on accumulation units 60,871 40,314 Closing net assets attributable to Unitholders 295,565, ,159,435 10

12 Financial Statements continued Balance Sheet as at 15 January 2011 Notes 15/01/11 15/01/10 ASSETS Investment assets 294,711, ,206,693 Debtors 7 2,122,049 1,145,195 Cash and bank balances 8 157,644 1,004,227 Total other assets 2,279,693 2,149,422 Total assets 296,991, ,356,115 LIABILITIES Investment liabilities - - Creditors 9 (774,757) (656,735) Bank overdrafts 8 (412,529) (485,637) Distribution payable on distribution units (238,410) (54,308) Total other liabilities (1,425,696) (1,196,680) Total liabilities (1,425,696) (1,196,680) Net assets attributable to Unitholders 295,565, ,159,435 11

13 Notes to the Financial Statements as at 15 January Accounting Policies (a) Changes to accounting policies The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investments, and in accordance with the Statement of Recommended Practice for Authorised Funds issued by the IMA in October 2010 ( the IMA SORP 2010 ). Previously the financial statements were prepared in accordance with the Statement of Recommended Practice for Authorised Funds issued by the IMA in November There has been no impact on the financial statements or the disclosure for the year. (b) Recognition of revenue Revenue from distribution and accumulation units in Collective Investment Schemes is recognised when the distribution is quoted ex-dividend. All other revenue is recognised on an accruals basis. Equalisation on distributions received from the underlying investments is treated as capital property of the Trust. (c) Treatment of expenses All expenses (other than those relating to the purchase and sale of investments and Stamp Duty Reserve Tax) are charged against revenue on an accruals basis. The Trust receives a rebate for managerial fees suffered by underlying Collective Investment Schemes. These are treated as revenue or capital depending on the treatment of Manager s fees in the underlying investment. In addition to the annual management charge the Manager is entitled to a performance fee. The performance fee is calculated on a daily basis by taking the performance of the Trust on a total return basis after charges and comparing it to the daily benchmark performance. The benchmark for this Trust is the IMA Active Managed sector average return. A fee is charged where the Trust outperforms the Benchmark, and subject to exceeding the High Water Mark. The High Water Mark is the highest level of cumulative outperformance which the Trust has achieved since it was established. Should a fee be chargeable by outperforming the benchmark and High Water Mark, the performance fee will be calculated by taking 20% of any outperformance. The maximum charge for the year is capped at 1% and is reset annually. Prior to 16 July 2009 a daily cap was applied to this figure that was the equivalent of 1/365th of 1%. From 16 July 2009 to 15 January 2010, this daily cap was removed and replaced with a maximum charge of 0.5% for the period. This figure is multiplied by the Net Asset Value of the Trust to calculate the fee. 12

14 Notes to the Financial Statements continued This is charged daily and will not be subsequently returned if the performance declines. At the Balance Sheet date, the High Water Mark is 12.32% and the Trust would be required to outperform the benchmark by 0.92% to trigger the performance fee. (d) Distribution Policy The policy is to distribute all available revenue, after deduction of those expenses which are chargeable in calculating the distribution. In order to conduct a controlled dividend flow, interim distributions will be at the Manager s discretion, up to a maximum of the distributable revenue for the period. All remaining revenue is distributed in accordance with the COLL. The Manager s periodic fee is deducted from revenue for the purpose of calculating the distribution. Distributions which have remained unclaimed by Unitholders for over six years are credited to the capital property of the Trust. (e) Basis of valuation of investments All investments are valued at their fair value as at 12 noon on 14 January 2011, being the last working day of the accounting year. The fair value for non-derivative securities is the bid-market price, excluding any accrued interest and the fair value for units in Collective Investment Schemes is the cancellation price or bid price for dual priced funds and the mid price for mid priced funds. Where values cannot be readily determined, the securities are valued at the Manager s best assessment of their fair value. (f) Taxation Provision is made for taxation at current rates on the excess of investment revenue over expenses. Deferred tax is provided for on all timing differences that have originated but not reversed by the balance sheet date, other than those differences that are regarded as permanent. Any liability to Deferred tax is provided for at the average rate of tax expected to apply. Deferred tax assets and liabilities are not discounted to reflect the time value of money. (g) Foreign exchange Transactions in foreign currencies are translated at the rate of exchange ruling on the date of the transaction. Where applicable, assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at 12 noon on 14 January 2011 being the last working day of the accounting year. 13

15 Notes to the Financial Statements continued 2. Net capital gains 15/01/11 15/01/10 The net capital gains on investments during the year comprise: Non-derivative securities 36,690,357 66,595,914 Currency (losses)/gains (36,106) 7,976 Management fee rebates 189, ,396 Transaction charges (1,950) (2,341) Net capital gains 36,841,720 66,825, Revenue 15/01/11 15/01/10 Franked UK distributions 2,957,757 1,609,882 Unfranked UK distributions 206,889 1,828,888 Interest distributions 38, ,683 Non taxable overseas distribution 89,326 - Taxable overseas distributions - 58,466 Bank interest 1 1,105 Management fee rebates 1,184,888 1,002,053 4,477,632 4,722, Expenses 15/01/11 15/01/10 Payable to the Manager, associates of the Manager and agents of either of them: Manager s periodic fee 2,302,575 2,065,902 Registration fees 405, ,122 Performance fees 1,166,809 1,265,357 3,875,153 3,442,381 Payable to the Trustee, associates of the Trustee and agents of either of them: Trustee s fees 31,767 25,068 Safe custody fees 6,769 5,503 38,536 30,571 Other expenses: Audit fee 8,910 8,690 VAT on audit fee 1,890 1,521 FSA fee ,947 10,358 Total expenses 3,924,636 3,483,310 Please refer to Note 1(c) 14

16 Notes to the Financial Statements continued 5. Taxation (a) Analysis of taxation charge in year 15/01/11 15/01/10 Corporation tax - - Irrecoverable income tax 17, ,000 Current tax [note 5(b)] 17, ,000 Deferred taxation [note 5(c)] - - Total taxation 17, ,000 (b) Factors affecting taxation charge for the year The Current tax charge excludes capital gains and losses for the reason that Authorised Unit Trusts are not subject to Corporation tax on these items. Current tax differs from taxation assessed on net revenue before taxation as follows: Net revenue before taxation 550,201 1,237,845 Net revenue before taxation multiplied by the applicable rate of Corporation tax at 20% 110, ,569 Effects of: Irrecoverable income tax 17, ,000 Revenue not subject to taxation (609,417) (321,976) Capitalised revenue subject to taxation 37,884 44,879 Excess management expenses not utilised 461,493 29,528 Current tax 17, ,000 (c) Provision for deferred tax There is no deferred tax provision in the current year. At the year end there is a potential deferred tax asset of 491,020 ( 29,528 as at 15 January 2010) due to surplus management expenses. It is unlikely the Trust will generate sufficient taxable profits in future to utilise these amounts and therefore no deferred tax asset has been recognised (15 January 2010: Same). 15

17 Notes to the Financial Statements continued 6. Finance costs Distributions The distributions take account of revenue received on the creation of units and revenue deducted on the cancellation of units and comprise: 15/01/11 15/01/10 Interim distribution 243, ,504 Final distribution 272,530 58, ,475 1,045,412 Add: Revenue deducted on cancellation of units 35,260 17,614 Less: Revenue received on creation of units (19,509) (21,965) Distributions for the year 532,226 1,041,061 Interest Bank overdraft interest 2, Total finance costs 535,021 1,041,983 The differences between the net revenue after taxation and the distributions for the year are as follows: 15/01/11 15/01/10 Net revenue after taxation for the year 532,224 1,040,845 Add: Revenue brought forward Less: Revenue carried forward (18) (20) Distributions for the year 532,226 1,041, Debtors 15/01/11 15/01/10 Amounts receivable for creation of units 34, ,855 Sales awaiting settlement 1,555, ,643 Prepaid expenses Management rebate receivable 276, ,547 CIS income tax recoverable 255, ,120 2,122,049 1,145,195 16

18 Notes to the Financial Statements continued 8. Cash and bank balances 15/01/11 15/01/10 Cash and bank balances 157,644 1,004,227 Bank overdrafts (412,529) (485,637) Net uninvested cash/(overdrafts) (254,885) 518, Creditors 15/01/11 15/01/10 Amounts payable for cancellation of units 322, ,961 Purchases awaiting settlement 22,592 73,000 Accrued expenses 429, , , , Contingent liabilities and outstanding commitments 17 There were no contingent liabilities or outstanding commitments at the balance sheet date. (2010: Same) 11. Risk in relation to financial instruments The Trust s investment objective is stated on page 2. In pursuing its objective, the Trust holds financial instruments which expose it to various types of risk. The main risks, and the Manager s policy for managing these risks, which were applied consistently throughout the current and preceding year, are set out below. (a) Credit and liquidity risk Credit risk is the risk of suffering loss due to another party not meeting its financial obligations. The primary source of this risk to the Trust is for trade counterparties to fail to meet their transaction commitments. This risk is managed by appraising the credit profile of financial instruments and trade counterparties. Liquidity risk relates to the capacity to meet liabilities. The primary source of this risk to the Trust is the liability to Unitholders for any cancellation of units. This risk is minimised by holding cash and readily realisable securities and via access to overdraft facilities. (b) Market risk Market risk arises mainly from uncertainty about future prices. The primary source of this risk to the Trust is the potential movement in the value of financial instruments held as a result of price fluctuations. Given that the Trust invests in other Collective Investment Schemes, there is market risk exposure in respect of the financial instruments held by these entities. The Manager adheres to the investment guidelines and borrowing powers established in the Trust Deed, Prospectus and the COLL. In this way, the Manager monitors and controls the exposure to risk from any type of security, sector or issuer.

19 Notes to the Financial Statements continued (c) Foreign currency risk Foreign currency risk is the risk of movements in the value of overseas financial instruments as a result of fluctuations in exchange rates. Given that the Trust invests in other Collective Investment Schemes, there is currency risk in respect of the financial instruments held by these entities. The direct foreign currency profile of the Trust s net assets at the balance sheet date was: Net foreign currency assets Monetary Non-monetary 15/01/11 exposures exposures Total Currency US Dollar - 19,896 19,896 Net foreign currency assets Monetary Non-monetary 15/01/10 exposures exposures Total Currency US Dollar ,497 10,614 (d) Interest rate risk Interest rate risk is the risk of movements in the value of financial instruments as a result of fluctuations in interest rates. The Trust s only interest bearing financial instruments were its bank balances and overdraft facilities as disclosed in note 8 and Collective Investment Schemes paying interest distributions. Cash is deposited, and overdraft facilities utilised, on normal commercial terms and earn or bear interest based on LIBOR or its overseas equivalent. The underlying Collective Investment Schemes which invest in fixed interest securities also have interest rate risk exposure. (e) Derivative risk Sensitivity analysis Derivative risk arises from uncertainty about future market movements. This risk is managed by the policies shown within Market risk. At the balance sheet date, the Trust held no derivatives. (2010: Same) (f) Fair value The fair value of a financial instrument is the amount for which it could be exchanged between knowledgeable, willing parties in an arm s length transaction. There is no significant difference between the value of the financial assets and liabilities, as shown in the financial statements, and their fair value. 18

20 Notes to the Financial Statements continued 12. Purchases, sales and transaction costs As the Trust mainly invests in Collective Investment Schemes, there are no transaction costs (2010: Same). 13. Unit classes The Trust currently has one unit class: R-Class. The annual management charge on this unit class can be found on page 23. The net asset value, the net asset value per unit and the number of units in issue are shown in the comparative table on page 22. The distribution information is given in the distribution tables on page Ultimate controlling party and related party transactions The Manager and Trustee are regarded as controlling parties of the Trust by virtue of having the ability to act in concert in respect of Trust operations. The ultimate controlling parties of the Manager and Trustee are Legal & General Group Plc and The Royal Bank of Scotland Plc, respectively. These entities and their subsidiaries are also related parties of the Trust. Legal & General (Unit Trust Managers) Limited acts as principal on all the transactions of units in the Trust. The aggregate monies received through creations or paid on cancellations are disclosed in the Statement of Change in Net Assets attributable to Unitholders. At the year end, the Manager and its associates held 0.00% (2010: 0.00%) of the Trust s units in issue. There were no units held by the Trustee or its associates. The Trust may hold investments in other Legal & General Collective Investment Schemes as disclosed in the Portfolio Statement. Details of all other material related party transactions during the year and any payment amounts outstanding at the balance sheet date are disclosed in notes 4, 6, 7, and 9 to the financial statements and the Statement of Change in Net Assets attributable to Unitholders. Within note 9, accrued expenses and bank overdraft interest (including amounts due to associates and agents) of 3,884 (2010: 3,122) are due to the Trustee and 396,968 (2010: 91,963) are due to the Manager. 15. Post balance sheet market movements As at the balance sheet date per these financial statements, the Net Asset Value per distribution unit was 59.66p. The Net Asset Value per distribution unit at 12pm on 2 March 2011 was 58.36p. This represents a decrease of 2.18% from the year end value. 19

21 Distribution Tables Distribution Tables for the year ended 15 January 2011 Group 1: units purchased prior to a distribution period Group 2: units purchased during a distribution period Equalisation is the average amount of revenue included in the purchase price of all Group 2 units and is refunded to the holders of these units as a return of capital. As capital it is not liable to Income tax but must be deducted from the cost of units for Capital Gains tax purposes. Interim dividend distribution in pence per unit Period 16/01/10 to 15/07/10 Net Distribution Distribution Revenue Equalisation 15/09/10 15/09/09 R-Class distribution Group Group R-Class accumulation Group Group Final dividend distribution in pence per unit Period 16/07/10 to 15/01/11 Net Distribution Distribution Revenue Equalisation 15/03/11 15/03/10 R-Class distribution Group Group R-Class accumulation Group Group

22 Trust Facts Total Expense Ratio R-Class 15 Jan Jan 10 Trust expenses 1.99% 1.81% Performance fees 0.43% 0.58% Total 2.42% 2.39% The Total Expense Ratio (TER) is the ratio of the Trust s operating costs (excluding overdraft interest and transaction charges) and all costs suffered through holdings in underlying Collective Investment Schemes, to the average net assets of the Trust. The TER represents an annualised figure. 21

23 Performance Record Net Asset Values Net Asset Net Asset Number of Accounting Value of Value Per Units Date Trust Unit In Issue 15 January 09 R-Class Distribution Units 188,910, p 486,702,706 Accumulation Units 2,119, p 5,460, January 10 R-Class Distribution Units 242,611, p 464,013,313 Accumulation Units 20,548, p 38,819, January 11 R-Class Distribution Units 258,564, p 433,378,676 Accumulation Units 37,001, p 61,190,421 Unit Price Range and Net Revenue R-Class Units Net Year Highest Offer Lowest Bid Revenue Distribution Units 2008 (1) 55.27p 39.78p p 34.35p p p 49.34p p 2011 (2) 63.26p 59.35p p Accumulation Units 2008 (1) 55.27p 39.78p p 34.62p p p 49.96p p 2011 (2) 64.12p 60.16p p (1) The Trust s units were launched on 25 April (2) The above table shows highest offer and lowest bid prices to 15 January 2011 and net revenue per unit to 15 March Past performance is not a guide to future performance. The price of units and income from them may go down as well as up. Exchange rate changes may cause the value of any overseas investments to rise or fall. 22

24 General Information Constitution Launch date: 25 April 2008 Year end: 15 January Period end dates for distributions: Distribution dates: Minimum initial lump sum investment: 500 Minimum monthly contribution: January 15 July 15 March 15 September Valuation point: 12 noon Management charge: Annual 1%* Performance fee charges: Please refer to Note 1(c) on page 12. Initial charge: 5% *The annual management charge was reduced to 0.85% on 1 October This was done on a temporary basis and the Manager reserves the right to increase this back to 1% at some point in the future. Pricing and Dealing The prices are published on the internet at com/investments/fund-information/daily-fund-prices/fundprices/multi-manager.html immediately after they become available. Dealing in units takes place on a forward pricing basis, from 8:30am to 6:00pm, Monday to Friday. Buying and Selling Units Units may be bought on any business day from the Manager or through a financial adviser by telephoning, completing an application form or on the internet at Units may normally be sold back to the Manager on any business day at the bid price calculated at the following valuation point. ISA Status This Trust may be held within this tax advantaged savings arrangement. The favourable tax treatment of ISAs may not be maintained. For full written information please contact your usual financial adviser or ring Call charges will vary. We may record and monitor calls. Stamp Duty Reserve Tax Stamp Duty Reserve Tax suffered on the surrender of units where applicable, has been charged against the capital assets of the Trust. 23

25 General Information continued Prospectus and Manager s Reports The Manager will send to all persons on the Unitholder Register annual and interim short form reports. Copies of the Prospectus and the most recent interim or annual reports are available free of charge by telephoning or by writing to the Manager. Do you have difficulty in reading information in print because of a disability? If so, we can help. We are able to produce information for our clients in large print or braille. If you would like to discuss your particular requirements, please contact us on Call charges will vary. We may monitor and record calls. Significant Changes Calculation of Unit prices From 7 June 2010, the way we price units in this Trust has changed. Each day, two unit prices are calculated: The Creation Price - based on the price of buying all the Trust s assets plus any costs involved, and The Cancellation Price - based on the price of selling all the Trust s assets less any costs involved. The difference between these two prices is known as the spread. Prior to 7 June 2010 we based our daily dealing price on either the creation or cancellation price, depending on the volume of overall transactions in the Trust for that valuation point. Generally,we would use the creation price if we were selling more units to clients than we were buying back and the cancellation price if we were buying back more units from clients than we were selling. This price would then become the published bid price - we would then add any applicable initial charge to arrive at the published offer price. From 7 June 2010,we have based the price of selling units to clients on the creation price and refer to this as the offer price (creation price plus any initial charge). The price at which we buy back clients units is based on the cancellation price and is referred to as the bid price. This means that there is a difference between the selling (offer) and buying (bid) prices for units, being the spread plus any initial charge. Both the bid and offer prices are published on our website: 24

26 General Information continued Manager Legal & General (Unit Trust Managers) Limited Registered in England No Registered office: One Coleman Street, London EC2R 5AA Telephone: Authorised and regulated by the Financial Services Authority Directors of the Manager M. B. Boardman S. Ellis M. J. Gregory S. R. Pistell S. D. Thomas Secretary A. Fairhurst Registrar Legal & General (Portfolio Management Services) Limited P.O. Box 6080 Wolverhampton WV1 9RB Authorised and regulated by the Financial Services Authority Dealing: Enquiries: Registration: Call charges will vary. We may record and monitor calls. Trustee The Royal Bank of Scotland Plc, Trustee and Depositary Services, Gogarburn, P.O. Box 1000, Edinburgh EH12 1HQ Authorised and regulated by the Financial Services Authority Independent Auditors PricewaterhouseCoopers LLP Hay s Galleria 1 Hay s Lane London SE1 2RD Investment Adviser Legal & General (Unit Trust Managers) Limited Registered in England No Registered office: One Coleman Street, London EC2R 5AA Telephone: Authorised and regulated by the Financial Services Authority 25

27 Authorised and regulated by the Financial Services Authority Legal & General (Unit Trust Managers) Limited Registered in England No Registered office: One Coleman Street, London EC2R 5AA